7th Pay Commission: How new pay structure, fitment factor make government employees RICH!

7th Pay Commission Latest News Today: The implementation of the 7th pay commission recommendations by central as well as several state governments has certainly put more money in the hands of employees, helping them in improving quality of their lives while also tackling inflation. A lot of time has passed since 7th CPC recommendations were submitted to the government. It had proposed a new pay structure and uniform fitment factor. However, there are still a lot of doubts about how salaries were fixed as per the new pay structure. Here's an explanation that was offered by the 7 Pay Commission report itself:

Arriving at a new salary

The 7th Pay Commission report said that the fitment of each employee in the new pay matrix is proposed to be done by multiplying his/her basic pay on the date of implementation by a factor of 2.57. It further said that the figure so arrived at should be located in the new pay matrix, in the level that corresponds to the employee’s grade pay on the date of implementation, except in cases where the Commission has recommended a change in the existing grade pay. 

"If the identical figure is not available in the given level, the next higher figure closest to it would be the new pay of the concerned employee. A couple of examples are detailed below to make the process amply clear," the pay panel said. 

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The pay panel suggested the following steps for locating one's  pay as per the new pay matrix

Step 1: Identify Basic Pay (Pay in the pay band plus Grade Pay) drawn by an employee as on the date of implementation. This figure is ‘A’. 

Step 2: Multiply ‘A’ with 2.57, round-off to the nearest rupee, and obtain result ‘B’. 

Step 3: The figure so arrived at, i.e., ‘B’ or the next higher figure closest to it in the Level assigned to his/her grade pay, will be the new pay in the new pay matrix. In case the value of ‘B’ is less than the starting pay of the Level, then the pay will be equal to the starting pay of that level. 

Explained with an example:

Suppose an employee 'H' is presently drawing Basic Pay of Rs 55,040 (Pay in the Pay Band Rs 46340 + Grade Pay Rs 8700 = Rs 55040). 

After multiplying Rs 55,040 with 2.57, a figure of Rs 1,41,452.80 is arrived at. This can be rounded off to Rs 1,41,453.  

The level corresponding to GP 8700 is level 13 (see chart), which gives the full correspondence between existing Grade Pay and the new Levels being proposed. 

In the column for level 13, the figure closest to Rs 1,41,453 is Rs 1,41,600. iv. Hence the pay of employee H will be fixed at Rs 1,41,600 in level 13 in the new pay matrix, the 7th pay commission report said.